Semiconductor Stocks Brace for AMD Earnings After Intel Sell-Off

A chip trade looking for a floor

This week tests whether the semiconductor rally can hold up under pressure from several directions at once. Analysts are encouraging investors to buy chip and AI-infrastructure stocks ahead of their reports. Meanwhile, the sector is coming off a sharp sell-off, oil has had one of its most violent days of the year, and Bitcoin is stuck well below its highs, all just before the U.S. midterm elections.

The bullish case is being made openly. Advanced Micro Devices (AMD), Arista Networks (ANET) and Datadog (DDOG) are being promoted as buys before earnings. All three carry Strong Buy consensus ratings, and average analyst price targets imply upside of about 31.6%, 47% and 28%, respectively.11 AMD and Arista report on November 3, and Datadog reports on November 4.11 Only two of the three are hardware companies, Arista in networking and AMD in processors. Still, all three depend on the same thing: spending on AI data centers.

What the chip sell-off did

The calls to buy come right after heavy losses. In Friday's trading, Intel fell 28.58% to $65.76, Datadog lost 11.50%, Qualcomm dropped 11.12%, AMD gave up 10.88% to $504.80, and Dell slid 10.77%.19 Broadcom fell 5.48% during the same stretch.18 The major indexes finished with a losing week. Tech led the decline after disappointing results from Amazon and Intel, while investors moved into defensive sectors such as health care and consumer staples.31

The worry runs deeper than one bad quarter at Intel. Amazon was the third hyperscaler, after Alphabet and Meta, to report negative free cash flow. That added to fears that heavy borrowing by the largest tech companies could point to wider financial stress.31 Together, Alphabet, Microsoft, Amazon and Meta spent about $201.9 billion on property and equipment in the third quarter. That is roughly $26 billion more than the operating cash flow they generated.38 Some analysts are already trimming: Melius cut price targets on Nvidia, AMD and Marvell, citing Big Tech lining up to raise cash.16

The chip bull case depends on hyperscaler spending, and that spending is now running ahead of the cash those companies bring in. This is the main tension for the sector. AMD's report is the first real test of how investors will treat it.

AMD as the week's bellwether

AMD's numbers have been strong. The company has beaten revenue estimates for 15 straight quarters, and its expected third-quarter revenue would be a new quarterly record, above the $11.54 billion it reported in the second quarter.16 TipRanks puts the revenue consensus at about $13.10 billion, up more than 40% from a year earlier, with earnings of $1.95 per share, up 62.5%.11 Benzinga cites the same $1.95 figure, against $1.20 a year ago.16 Not every data provider agrees. A calendar built on Nasdaq consensus lists AMD's estimate at $1.68 against $0.97 a year ago.33 That gap probably reflects different accounting bases rather than a real split in expectations, but it means the "beat" or "miss" headline could depend on which number a given outlet uses.

Reports also differ on how far AMD has run this year. TipRanks says the stock is up more than 135% year to date.11 Benzinga says it is up over 100% but has fallen from its highs in the recent sell-off.16 In both versions, the stock has a lot of gains that could be given back.

Analysts mostly agree on the direction but not on how much upside is left. Susquehanna's Christopher Rolland raised his target to $650 from $620. He expects data center demand to drive better-than-expected results and guidance, and he sees shipments of the MI450 accelerator and the Helios rack-scale system picking up from the fourth quarter into the first half of 2027.11 Bank of America previously raised its target to $720.20 Morgan Stanley's Joseph Moore is more cautious. He keeps an Equal-Weight rating, though he lifted his target to $510 from $465. He expects server CPU strength to at least offset weakness in PCs.16 A $510 target is barely above Friday's close, while the consensus average of $664.31 implies about a third more.1119 That spread between analysts shows real uncertainty about how much good news is already in the stock.

Beyond AMD: networking, memory and foundry

Arista may be the cleanest bet on AI networking. Analysts expect adjusted EPS of $1.08, up from $0.75, on revenue up 44% to $3.33 billion. Bank of America's Tal Liani expects mid-40% growth through late 2026, slowing to nearly 30% in 2027.11

Some other names are holding up better than the sell-off suggests. Tower Semiconductor beat estimates with EPS of $1.15 against $1.06 expected, and Lumentum beat and guided above estimates.32 Bigger chipmakers have also been beating. Nvidia's $2.22 was its fifth straight EPS beat, Micron's $33.42 was its eighth, and TSMC earned $4.60 per ADR against $4.46 expected.15 TSMC CEO C.C. Wei said the company did not see any sign of an AI slowdown, and it plans to more than double N2 capacity in 2027.19 TSMC is also "being prudent" about 2027, and Nvidia carries $279 billion in supply commitments, so the risks do not all point one way.15

The weaker spots are in analog and industrial chips. ON Semiconductor's analysts kept mostly positive ratings but cut their targets. B. Riley went to $105 from $127, Susquehanna to $120 from $150, and TD Cowen to $75 from $95.12 Even the timing of ON's report is unclear. One outlet listed it as last Friday, while weekly calendars placed it on Monday, November 2.123135 Investors are also picking carefully within AI chips. One widely shared view favors Broadcom, at roughly 18 times forward earnings with AI semiconductor revenue up 221%, over Intel, at about 51 times forward earnings.14

The same reading holds across the sector: investors are moving toward companies with clear AI demand and away from turnaround stories, rather than dropping chips altogether.

Oil's risk premium unwinds, for now

Oil was the other big mover. On Monday, WTI fell 7.4% to settle at $96.46, its biggest daily loss since late July, and Brent fell 7.6% to $104.77. The drop came after both President Trump and Iranian President Masoud Pezeshkian signaled openness to diplomacy.4 Secretary of State Marco Rubio's statement that Washington would prioritize diplomacy was a key trigger.7 The day before, Iranian and Qatari officials held a third straight day of talks.8

The drop is large partly because of how much risk had been priced in. Brent briefly touched $118 in October, and Goldman Sachs estimates that about $27 per barrel of that rally was geopolitical risk premium.1 Oil had gained more than 10% in October, with traders positioning for a possible escalation after the midterms.4 Physical risks are still there. A projectile reportedly hit a vessel in the Strait of Hormuz on Sunday, days after a tanker fire drove Brent to $117.1 OPEC+ also left December targets unchanged.6

Forecasters have not changed their views much. Goldman raised its December Brent forecast to $105, and UBS sees $110 by year-end.1 Analysts quoted by Reuters warned that Brent could push toward $120 if rhetoric heats up after the vote.8 Coverage also points out that the market has sold off on settlement rumors before, only to spike again when fighting resumed.4 Our view is that Monday's drop is a repricing of tail risk, not a resolution. That still matters for chips. Cheaper oil eases inflation concerns, and with markets reportedly pricing about an 80% chance of a December Fed hike, any relief on rates helps richly valued growth stocks.39

Bitcoin stays on the sidelines

Bitcoin has not joined any rebound. It traded around $78,000 on Monday, after briefly falling to about $76,400 last week. That drop came alongside a $6.3 billion security breach at Binance and roughly $1.5 billion in leveraged liquidations.21 At about $78,062, it sits about 38% below its all-time high of $126,080.22 It is down roughly 8% over the past month and nearly 30% over the past year.25 Bitcoin fell 7.3% in October, and one chart analyst has flagged a possible further 30% correction toward $57,000.28

The usual idea that Bitcoin trades like a high-beta tech stock does not fit this week's coverage. Its problems are crypto-specific: an exchange hack, leverage being flushed out, and uncertainty about crypto regulation depending on which party controls Congress.28 Its first test is whether it can reclaim $80,000.21

The bottom line

The week's schedule is crowded. Apple and Palantir report Monday, Election Day and AMD fall on Tuesday, Qualcomm and Arm report Wednesday, and the October jobs report arrives Friday.3537 Broad S&P 500 earnings growth is still running near 30%, but companies are beating estimates by only about 1.4% on average, far below historical norms.31

The "buy before earnings" calls are a bet that AI demand will outweigh worries about hyperscaler cash burn. The evidence from TSMC, Micron and Arista's growth outlook supports that bet. But after Intel's collapse, investors will punish any sign that customers are slowing orders, and AMD's guidance, more than its reported quarter, will decide where the sector goes next. Falling oil helps at the margin. Bitcoin's weakness says more about crypto's own problems than about risk appetite in general.